Majority UP sugar mills start crushing operations

Only 15 of the total 119 mills yet to join league

Nearly a month after the first sugar mill begun crushing operations in the current season in Uttar Pradesh, 104 units have also started functioning.

According to the latest available data at the state sugarcane department here, 15 of the total 119 mills had not started operations.

In October, the state had directed mills to start operations by November 10 and 15 in the western and eastern regions, respectively. However, the first private and cooperative mill could start only on November 10 and 14, respectively.

So far, mills have produced nearly 410,000 tonnes of sugar after crushing 4.43 million tonnes (mt) of cane, with sugar recovery standing at about nine per cent. The mills have paid about Rs 33 crore to farmers towards cane dues for the current season.

The sugarcane acreage has been estimated at about 2.1 million hectares.

Meanwhile, the private sugar mills still have to clear arrears of about Rs 1,112 crore pertaining to 2013-14 season. Of the 95 private mills, 77 have settled 100 per cent dues.

Besides, 23 cooperative and the Uttar Pradesh State Sugar Corporation (UPSSC) unit had already settled their all liabilities.

During 2013-14 crushing season, the Uttar Pradesh’s sugar output had dropped by 13 per cent to about 6.42 mt. During 2011-12 and 2012-13, the sugar production had stood at 6.97 mt and 7.4 mt, respectively.

This year, the government had retained state agreed price (SAP) of cane at Rs 280 a quintal. The mills had been allowed to pay Rs 240 a quintal upfront. The remaining Rs 40 a quintal should be paid within three months of the end of the crushing season.

Of Rs 40 a quintal, the government, akin to last year, would directly incur Rs 11.4 a quintal as incentive to mills in the form of cane societies commission (Rs 6.60 a quintal), Rs 2 a quintal (cane purchase tax) and Rs 2.80 a quintal (sugar entry tax). The remaining Rs 8.60 a quintal would be given to mills after they had incurred this as payment to farmers.

For the remaining Rs 20 a quintal, a high-level state committee would consider the average price of sugar and byproducts over eight months (October 2014-May 2015) to decide on sharing of the payment liability.

Uttar Pradesh has set the floor price of sugar at Rs 3,100 a quintal, molasses (Rs 390 a quintal), bagasse (Rs 167 a quintal) and press mud (Rs 26 a quintal). If the average price stays at this level, the sugar mills would pay Rs 20 a quintal.

If their market prices increase, the government could deduct floor price in ratio from direct subsidy of Rs 8.60 a quintal. If prices fall, the sugar mills would be compensated in the proportional ratio in Rs 20 a quintal.
STARTING OFF

• In October, Uttar Pradesh had directed mills to start operations by November 10 and 15 in the western and eastern regions, respectively
• The private sugar mills still have to clear arrears of about Rs 1,112 crore pertaining to 2013-14 season
• Of the 95 private mills, 77 have settled 100 per cent dues
• During 2013-14 crushing season, the Uttar Pradesh’s sugar output had dropped by 13 per cent to about 6.42 mt
• Uttar Pradesh has set the floor price of sugar at Rs 3,100 a quintal
• If market prices increase, the government could deduct floor price in ratio